A Fort Worth commercial roofing company has settled a lawsuit brought by the federal government claiming paycheck protection program fraud, according to a news release from the U.S. Attorney’s Office for the Northern District of Texas.
Empire Roofing, along with a nationwide network of roofing and disposal companies, agreed to settle for $9 million, according to the Department of Justice. The company was accused of violating the False Claims Act by falsely certifying that eight of its affiliates were eligible for Small Business Administration paycheck protection program loans.
The program was created in 2020 to help small businesses facing economic trouble as a result of the COVID-19 pandemic. It was intended to allow those businesses to continue paying their employees. Only businesses that employed 500 employees or fewer could receive the loans, and in applying for the loans or loan forgiveness, the businesses had to certify that the information they provided in applications was fully truthful and accurate.
The Justice Department said Empire Roofing and its affiliates received more than $6.7 million in those loans and later had them all forgiven in full. While Empire Roofing and its affiliates were able to certify that they had fewer than 500 employees, the rules of the loans also required the businesses to include the number of employees of all affiliated companies to determine eligibility.
Because federal authorities said the company and its affiliates had more than 500 employees combined, they were ineligible, the DOJ said in the news release. That also made all of them ineligible for loan forgiveness under the CARES Act.
Small Business Administration General Counsel Therese Meers said in the news release that the settlement “demonstrates the excellent results achieved through the combined efforts of SBA and the Department of Justice to uncover and forcefully respond to PPP misconduct.”
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The lawsuit was filed by a whistleblower, Sidesolve, which will receive $1 million as a part of the settlement.